The government said on Monday it had decided to auction to commercial operators a prime range of radio wave spectrum for mobile Internet services.
The government has decided to release 3G spectrum for broadband wireless access. Auction has been decided for 3G spectrum, Andimuthu Raja, the telecoms minister, said.
3G, or third generation, wireless networks allow operators to transmit data, voice and video at high speeds, enabling Internet services on mobile devices.
The spectrum will be given in the 2.1 gigahertz band, the telecoms ministry said in a statement.
Raja said firms without a telecom licence could bid for spectrum, as could foreign firms if they receive security clearance. He added policy would ensure healthy competition.
The telecoms regulator in September 2006 recommended only licenced operators be eligible for the auction of 3G spectrum.
Apart from the price of the spectrum, service providers would have to pay 0.5 percent of their total adjusted gross revenue (AGR) every year, the ministry said.
This additional revenue share is proposed to be 1 percent of AGR after three years of spectrum assignment, it added.
Firms will not be permitted to trade or resell the spectrum they are allotted, and they will not be allowed to merge in the first five years after the grant, the statement said.
About 30 megahertz of spectrum would be distributed, among at least 3 firms, Telecoms Secretary Dinesh Mathur told reporters.
If we decide on five megahertz (per firm) instead of 10 megahertz, we will have six operators, Mathur said.
India will also auction licences for broadband wireless services, with the reserve price fixed at 25 percent of the amount for 3G spectrum, the statement said.
Firms will be allotted 10 megahertz of spectrum for broadband services, in the 2.5 gigahertz band, it said.
The services will initially be permited for telecom licencees and top-tier Internet service providers.
The service provider will have to pay additional annual spectrum charges similar to that for 3G spectrum, it added.
The government also plans to allow mobile phone subscribers to keep the same number when they change networks -- in the four cities of Mumbai, Delhi, Kolkata and Chennai at first -- by the fourth quarter of 2008.